Estate Planning, Part 4: What Can You Pass Down?

Don't Forget About Your Everyday Accounts

September 2012

Ally Bank doesn't offer estate-planning services, but as part of our four-part estate-planning series, we provide this article as a way to arm you with information you can use to make better financial decisions.

An estate plan can encompass just about anything you want. By planning ahead, you can take steps to protect your financial legacy and share it with your children and grandchildren.

With an estate plan, a lot of the focus, naturally, is on assets such as stocks, bonds, property, and so forth. By writing a will, you can determine how these items are to be distributed once you're gone.

But bank accounts usually are handled a little differently - and how you plan to manage these assets can help you streamline the process of passing your estate onto your heirs.

Include Bank Accounts in Your Estate Plan.

Bank products like certificates of deposit (CDs), money market, savings and checking accounts can be "titled" - a way to ensure that they automatically pass to the person you designate, without having to be part of a will.

In addition, your bank accounts can help you make sure that your financial legacy remains intact for your heirs. Money kept in CDs and savings accounts will probably not decline in value in the same way that stocks might. When your money is in these accounts at a Federal Deposit Insurance Corp. (FDIC)-member bank, you're insured to the maximum amount allowed by law, so there is little risk to that portion of your financial estate.

But your estate planning also should look beyond major financial assets.

Dig Into the Details.

"People sometimes forget to specify smaller belongings that may have special significance to someone in the family," said Erin Baehr, president of Baehr Financial in Stroudsburg, Pennsylvania, in a recent interview with Ally Bank. "It's always better to work that out ahead of time than have your family fighting over things or trying to figure out what you would have wanted."

Those details can be spelled out in a will. Or better yet, said Baehr, "You may wish to include a provision within the will that refers to a side letter. This letter would specify who gets specific belongings of yours, and then you can change that letter without revising your entire will if things change - for instance, if you sell your '67 Mustang that you had intended to leave to your brother."

All of this doesn't need to be a secret, either. A common mistake is, "not sitting down and talking to your heirs about your estate plan," said Jim Heitman, owner of Compass Financial Planning in Alta Loma, California, in a recent interview with Ally Bank. "The best time to communicate what you want to accomplish is while you are still alive and able to answer questions."

Finally, you can also pass along less tangible - but nevertheless important - assets.

In fact, your estate plan can help you share the values and experiences of a lifetime. "You may want to think about what kind of legacy you want to leave behind as far as the lessons you want to teach your family," said Baehr. "You can write a letter to your family and include that in your estate plan."

Learn More About Ally Bank

Regardless of where you are in the estate-planning process, consider that Ally Bank offers a variety of banking accounts at interest rates that are consistently among the most competitive in the country.

You can learn more and open accounts online, and live customer care is available 24/7 via email, chat and phone at 877-247-ALLY (2559).

Related articles: